News briefs and information from Federal agencies and Capitol Hill on government activities, legislation, and grants of interest to the telemedicine, telehealth, and health IT community. Edited by Carolyn Bloch.

Wednesday, February 29, 2012

State to Improve Health Outcomes

In January, Louisiana’s Governor Bobby Jindal submitted the state’s FY 2013 budget to the legislature where improving healthcare outcomes will play a big part. The healthcare budget is proposed at $8.96 billion, up from the existing operating budget amount of $8.28 billion.

According to the Governor’s budget, this fiscal year represents a monumental shift in healthcare in Louisiana. With the full implementation of BAYOU HEALTH and the Louisiana Behavioral Health Partnership, the state is embracing a new approach to both physical and behavioral healthcare focusing on outcomes, streamlining delivery and payment systems, saving critical dollars, and dramatically improving access to care.

Under BAYOU HEALTH, which will be fully implemented by the start of FY 2013, the state is transitioning away from the fee-for-service model and going towards models based on medical homes for most Medicaid beneficiaries. As a result, BAYOU HEALTH estimates a savings of $135.9 million in the Medicaid program.

According to the Governor, FY 2013 represents a new way to provide behavioral healthcare for 50,000 Louisiana children and 100,000 adults. The Louisiana Behavioral Health Partnership includes using the Coordinated System of Care to streamline the state’s approach to delivering and financing behavioral health services.

Under the Partnership, the state has contracted with a third party to serve as a single point of entry for people in need of behavioral healthcare services. Previously, services have been fragmented and funded through several different mechanisms with some services falling under Medicaid, while others were paid for strictly with State General Funds or with Federal block grants.

The FY 2013 budget request includes several strategies to deal with cost containment. The budget includes cost containment measures such as:

• $1 million to expedite the inclusion of waiver recipients into BAYOU HEALTH• $1.2 million to coordinate non-waiver services• $3 million for using a managed care approach for long term personal care services• $1.5 million to transition the pharmacy program from using the Average Wholesale Price to Average Acquisition Costs• $3.2 million to restructure payments to hospitals to the Medicare-like reimbursement system• $6 million to change the reimbursement methodology for nursing homes to base reimbursements on the acuity of Medicaid patients instead of the entire home population.

As the Governor reports, Medicare costs continue to balloon out of proportion to state budgets and revenues. Medicaid expenditures have increased by about 40 percent with an average rate of growth annually of nearly 7 percent with increases to continue to grow in the coming years.

Because of the continuing growth anticipated, DHH will implement an overall two percent reduction in the Medicaid private provider program. The Department will be working closely with each provider type in Medicaid to identify how to achieve that reduction. That same two percent reduction in the private provider program will also be applied to the managed care companies for both BAYOU HEALTH and the Louisiana Behavioral Health Partnership.

The Greater New Orleans Community Health Connections (GNOCHC) initiative funded through a special waiver in Medicaid uses block grant funds to help in hurricane recovery programs. The Governor pointed out that GNOCHC clinics represent a gold standard for the primary care medical home model for the state. Originally funded by a three year $100 million grant after Hurricane Katrina, DHH applied for and received permission to allow the clinics to draw down from the Disproportionate Share Hospital (DSH) dollars normally used for hospitals to care for the indigent.

In addition, the proposed FY 2013 budget will help small and rural communities with the $1.4 million in State General Funds included in the FY 2013 budget. There would be funds for 16 new Federally Qualified Health Centers and Rural Health Clinics plus about $1.7 million in State General Funds to annualize funding for 22 centers enrolling in FY 2012.

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